Indian startups to boost hiring by 20-30% in FY25 as funding improves

Indian startups are poised to increase their hiring efforts as the funding environment improves after a prolonged period of layoffs. Staffing firms forecast a 20-30% rise in recruitment among startups heading into FY25, driven by a 14% YoY increase in funding, which reached US$ 10.9 billion (Rs. 92,563 crore) in FY24. The decline in layoffs, which fell by 46% YoY to 8,895 in FY24 from an estimated 16,398 in 2023, reflects a shift toward growth. Key sectors such as retail, e-commerce, fintech, FMCG, automotive, travel, and hospitality are expected to see the most significant hiring growth. In contrast, sectors like BFSI, telecom, healthcare, pharma, and energy may experience subdued hiring activity, particularly in Q1 FY25.

The slowdown in hiring was largely caused by the "funding winter," which froze investments for 12-18 months. Investment volumes dropped from US$ 36 billion (Rs. 3,05,712 crore) in FY21 to US$ 24.7 billion (Rs. 2,09,752 crore) in FY22 and US$ 9.6 billion (Rs. 81,523 crore) in FY23. However, startups focus on restructuring teams and long-term growth as funding recovers. For instance, a Series A funding round of US$ 10 million (Rs. 85 crore) typically supports hiring 25 IT professionals. Despite the recovery, companies such as Paytm, Flipkart, and Byju laid off thousands in FY24. Active hiring demand from startups currently stands at around 20,000 openings, much lower than the 45,000-55,000 openings during the peak of hiring activity. Attrition rates are expected to stabilise, with average salary expectations rising by 5-7%.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.